Santos reports lower 2023 profit

Australian LNG player Santos reported a drop in its underlying net profit in 2023 due to lower prices.

The independent LNG producer, which recently ended its merger talks with compatriot LNG player Woodside, said on Wednesday that its January-December underlying profit reached $1.42 billion-

This marks a drop of 42 percent compared to $2.46 billion in 2022.

Santos said last month that its sales revenue dropped 21.1 percent to $1.48 billion in the fourth quarter, while full-year 2023 revenue of $5.88 billion dropped by 24.4 percent compared to record revenue of $7.79 billion in 2022.

According to Santos, these results reflect lower oil and LNG prices, and lower production compared to the corresponding period.

The firm reported free cash flow of $2.12 billion and declared final dividend of $17.5 cents per share unfranked ($569 million) bringing total dividends declared for the year to $26.2 cents per share.

Barossa 67 percent complete

Santos managing director and CEO, Kevin Gallagher, said “today’s results demonstrate the capability of Santos to generate strong cash flow, develop major projects, and deliver sustainable shareholder returns.”

“Demand for our products remains strong. We are expanding our LNG portfolio by delivering on Barossa with first gas expected in the third quarter next year. We are also progressing Papua LNG towards a final investment decision,” Gallagher said.

Back in 2021, Santos took a final investment decision for its $3.6 billion Barossa project to secure feed gas for the Darwin LNG plant.

Natural gas would be extracted from the Barossa field, located in Commonwealth waters about 285 kilometers offshore north-north west from Darwin, and transported via a pipeline to the existing DLNG facility.

Gallagher said the Barossa gas project is now 67.4 percent complete.

“The pipeline that will deliver gas from the field to Darwin LNG is now 68 percent complete and more than 50 percent of the pipe has been laid. The first Barossa well has been completed and the second well is under way,” he said.

At full production rates, Barossa is expected to add 1.8 mtpa to Santos’ expanding LNG portfolio, Gallagher added.

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